Letter: Government Policy Is to Blame for Many Local Authority Financial Woes

Published on: 19 Jul, 2023
Updated on: 19 Jul, 2023

From: Mark Stamp

In response to: GBC to Set ‘Strict Controls’ on New Spending to Tackle ‘Extremely Concerning’ Finances

There are many local authorities of all colours across the country in financial difficulties and there is a common cause.

Over the last 13 years local authority funding from central government has been slashed and councils encouraged to make investments in property and borrow at low-interest rates to plug the gap without anyone questioning what happens when interest rates rise, which is mandatory when any of us take out a mortgage.

Money is being wasted in local government by preparing bids to fight against other councils for pots of money with tight restrictions on how it can be spent rather than letting the local politicians judge how best to spend it for their residents.

Ministers have not cracked down on profits leaking out of the social care sector to companies based offshore or done anything to fix our broken business rates system, which damages town centres. Meanwhile, they launch culture wars against councils such as South Cambridgeshire for implementing schemes that are actually saving money.

One of the underlying themes from the hustings for the recent election was that borough councillors actually have very few levers they can pull and on most issues they are broadly in agreement. Our political system is broken and that can only be changed at a general election.

Responses to Letter: Government Policy Is to Blame for Many Local Authority Financial Woes

Jim Allen Reply

July 19, 2023 at 4:33 pm

In respect of any finance. If the income drops spending has to drop.

Just keep putting it on the credit card is a sure way to financialy fail

Its easy to overspend when its someone elses money. Perhaps making councillors jointly and severally responsible for prudent accounting jss the way forward
Keith Francis Reply

July 20, 2023 at 5:56 pm

Yes, the government encouraged local authorities to borrow money from the Loans Board at ridiculously low-interest rates. Is this a reason why SCC is at last having a Strategic Investment Board meeting next Tuesday, July 24 2023.

Except why is anything to do with the council’s property companies left out of the agenda and the public is excluded from those two items when the former Debenhams’ site in Winchester is discussed by councillors?

SCC cant hide this one forever as the information becomes public when those accounts must be available at Companies House.

See: SCC Changes Debt Repayment Strategy Labelled ‘Shockingly Blasé’ by Guildford Councillor
Sam Peters Reply

July 27, 2023 at 10:26 am

Well said. To add some specifics, Conservative governments had cut local council funding by around 60 per cent from just 2010-2020 – not including the added impacts of Covid. For perspective, this funding accounted for around half the council’s budget on average.

During the pandemic, local councils were obligated to continue providing existing services while also mandated to deliver various new ones. While tens of billions flowed to chums and donors through the illegal ‘VIP lanes’, funds for local councils fell short, leaving them with a £4 billion additional bill.

And unsurprisingly, these cuts have been mainly focused on councils not run by Conservatives, pushing already poorer areas into further deprivation. Cuts to Labour councils were nearly 50 per cent higher than cuts to Conservative councils on average from 2010-2020, with nearly two-thirds of the worst affected 20 councils being Labour-run and every single one of the least affected 20 councils being Conservative-run.

Indeed, this is nothing new – our current Prime Minister has even boasted on camera of taking money from deprived areas to spend in wealthy areas like his own constituency.

Just as the so-called “levelling up” funding, this is the very definition of pork barrel politics. If Guildford Borough residents want their local council to do more – or if Angela Richardson wants to bemoan the closure of public toilets – then we need to look at the reasons local councils around the country are struggling, and vote accordingly on a national and local level.

Sam Peters has stood as a candidate for the Green Party in recent local elections